Information Systems and Operations Management Area

Online ad fraud is a feature, not a bug

Katelynn C Hipolito — Tue, 17 Mar 2026 17:26:46 +0000

Online ad fraud is a feature, not a bug Katelynn C Hipolito Tue, 03/17/2026 - 13:26

Technological advancements and the dynamics of the platform economy make rooting out fraud more complicated than it may seem.

With print media circulation and broadcast television viewership in free fall, a lot is riding on the online advertising space being able to take up the slack. The good news is, digital ad spend is booming: The global total for 2025 is expected to surpass $678 billion, at an annual growth rate of nearly eight percent.

The bad news? A good chunk of that money is chasing a mirage.

Online ad fraud—where ad publishers falsely inflate engagement metrics (impressions, clicks, etc.) to boost revenues—is a growing problem that eats upwards of 20 percent of global ad spend.

Min Chen. Photo provided

Min Chen and Abhishek Ray, both professors in the information systems and operations management area at Costello College of Business at �鶹��Ƶ, are researching how online ad networks, such as Google Ads, can improve upon existing anti-fraud methods. Their recently published paper in Management Science explores deep-rooted dynamics of the online ad ecosystem that make eliminating fraud even more complicated than it may seem at first glance. The paper was co-authored by Subodha Kumar of Temple University.

The researchers used a game-theoretic model to replicate the interconnected decision-making of the three players involved: advertisers, publishers, and the networks that serve as go-between.

“The way the ecosystem works is that the platforms in the middle, the ad networks, shares the benefit from the transaction,” Chen explains. “People have been arguing whether the network is incentivized to put their best efforts behind deterring fraud, since the fraudulent traffic benefits the networks too. So we tried to create a model to capture this.”

“If the advertisers rely solely on the reports from the ad networks, they may be at risk. They should use third-party tools to audit the performance better.”

—Min Chen, information systems and operations management professor at the Costello College of Business at �鶹��Ƶ

In addition, the model incorporates the two main fraud deterrents that networks routinely use. One is technological—platforms can adopt tougher standards for fraud detection, widening the scope of suspicious activity that gets flagged. The other is economic—lowering payments to all publishers so as to disincentivize large-scale fraud.

Surprisingly, the researchers find that the online ad economy works best when the two approaches seem to be working at cross-purposes. A tightening in fraud detection technology, paired with high payments for publishers, may sometimes produce the best outcomes for advertisers, publishers, and networks, as the market evolves.

The reason is rooted in the imperfect nature of fraud detection. To be sure, detection systems are improving all the time, especially with the advent of AI. But fraudsters do their best to blend in and adapt, using technological tools that often outpace those of their pursuers. “You cannot catch all the fraud, and if you try, you are going to mis-detect a lot of non-fraud,” Chen says.

Tougher fraud detection, then, will always mean more false positives, no matter how good the technology gets. To counter this inherent unfairness that penalizes good and bad actors alike, the ad network’s payment to publishers need to go up. Otherwise, publishers may take their business elsewhere—especially those most valuable to the system, i.e. those that are trustworthy— thereby decreasing the advertisers’ valuation on ad traffic.

Abhishek Ray. Photo by Jeffrey Porovich/Costello College of Business

“These ad networks are kind of a unique system where you can be monetarily rewarded for being honest, or punished for being dishonest,” Ray says. “What we discover for this system is there can be a way in which we can give carrots to people, not just sticks.”

On a similar note, the researchers find that an attempt to purge “bad apple” advertisers from the system can backfire due to false positives. In fact, fraud can sharply increase if networks, believing they have solved the problem, relax their fraud detection standards and raise incentives for the remaining advertisers. “Since the publishers who produce the fraudulent traffic are fewer now, the ad network may no longer need to maintain a strict detection policy. This can encourage the remaining ones to commit much more fraud,” Chen explains.

To Ray and Chen, online ad fraud is, in at least one sense, no different from older forms of malfeasance that are found in all free societies. “We need to have some kind of mechanism for managing the level of fraud, because the fraud detection method is never going to be perfect, whether it’s financial fraud, accounting fraud, etc.,” Chen says.

But as an example of the contemporary platform economy, the online advertising ecosystem is also distinctive, in that its de facto regulatory authority has skin in the game. The ad networks’ mixed incentives—as both beneficiaries and inhibitors of fraud—can undermine integrity and trust within an already-compromised system.

“If the advertisers rely solely on the reports from the ad networks, they may be at risk,” Chen says. “They should use third-party tools to audit the performance better.”

In This Story

Min Chen

Abhishek Ray

Topics

Research

ISOM Faculty Research

Costello College of Business Faculty Research

Information Systems and Operations Management Area

Costello College of Business News

A.I. & Innovation – Costello

Costello Research Data Analytics

Costello Research Digital Platforms

Costello Research Retail

Costello alum prepares to compete at Southeast Asian Games

Katelynn C Hipolito — Thu, 13 Nov 2025 20:51:48 +0000

Costello alum prepares to compete at Southeast Asian Games Katelynn C Hipolito Thu, 11/13/2025 - 15:51

Sidney Yap, BS Information Systems Operations Management ‘20, MS Management ‘21, Business Analytics Grad Cert ‘22, MBA ‘25, exemplifies exceptional balance—driving innovative strategies at Navy Federal while representing the Philippines internationally in the hammer throw.

Action shot from 2025 Philippine Athletic Championships. Photo by Philippines Athletic Track and Field Association (PATAFA).

As a student-athlete at �鶹��Ƶ, he competed in track and field for nearly five years, spanning four Costello College of Business academic programs. In addition to the hammer throw, he also competed in discus and the weight throw, an indoor equivalent to hammer. Not long after he began competing at the university, he began his career as an intern at Navy Federal. Over time, he advanced in athletics, academics, and his career—building a foundation that continues to shape his success today.

Sidney Yap. Photo provided

Now preparing for the 2025 Southeast Asian Games in Thailand this December, Yap is focused on timing his peak performance for competition. Recently promoted to enterprise data analytics consultant at Navy Federal, he starts his day early so that he can focus on his training in the evenings. As busy as he is, he prefers it that way, driven by his passion for athletics, education, and professional growth.

Balancing athletics with his career is nothing new for Yap. While at George �鶹��Ƶ, he worked closely with professors, coaches, and managers to coordinate schedules and manage workloads. Starting his career at Navy Federal as an intern during his sophomore year, he recognizes strong parallels between athletics and his business career—both requiring discipline, strategy, and data-driven decisions.

As much as his athletics skills and habits help him in his career, his job at Navy Federal in turn opened the door to this remarkable opportunity to compete in Thailand. At a company luncheon, a manager approached him after learning about his track and field background.

“He hit me with the question—What’s next?” Yap recalls.

Sharing Filipino heritage, the manager offered to help him represent the Philippines. That conversation led to connecting with the national team coach, securing dual citizenship, and obtaining a passport. Since then, he has competed in the Philippine Nationals in 2024 and 2025. Representing his family’s heritage on an international stage adds deeper meaning to his athletic pursuits.

Sidney Yap at his MBA graduation in Spring 2025. Photo provided

Yap is appreciative of the business foundations and location of his alma mater, reflected in his decision to remain at Costello for his undergraduate and graduate programs. Originally from the area, it wasn’t until he started researching colleges to apply to in high school that he learned it was a top-notch school full of opportunity.

At Costello, he experienced being taught by high-level faculty who prepared him to succeed in his current role. One of his first courses was on organizational behavior taught by Victoria Grady, associate professor of management and director of the MS in management program.

“Classes like that help with refinement of your people skills, and I think that goes beyond how you are in the workforce because those organizational behaviors is teaching me, in my mind, how to be a better person with people I interact with in athletics and in public.”

“Classes like that help with refinement of your people skills, and I think that goes beyond how you are in the workforce because those organizational behaviors is teaching me, in my mind, how to be a better person with people I interact with in athletics and in public.”

— Sidney Yap, BS Information Systems Operations Management ‘20, MS Management ‘21, Business Analytics Grad Cert ‘22, MBA ‘25

Yap’s story reflects the unique synergy between academic excellence and athletic discipline forged at George �鶹��Ƶ. His years as a student-athlete prepared him to navigate the demands of rigorous coursework, competitive sports, and a growing professional career—all at once. The foundation he built through Costello’s programs continues to guide him as he balances his role at Navy Federal with training for the Southeast Asian Games. As Yap sets his sights on gold in Thailand, he carries the same mindset into his professional journey—proving that excellence isn’t confined to the field but is a pursuit that spans every arena of life.

In This Story

Victoria Grady

Learn more

Topics

Management Area

Costello College of Business Alumni

Costello College of Business Graduate Programs

Costello College of Business Students

Costello College of Business News

Information Systems and Operations Management Area

Alumni

Costello MBA program

Costello Flex MBA program

George �鶹��Ƶ researcher is using AI to identify human trafficking hot spots

Katelynn C Hipolito — Mon, 29 Sep 2025 18:20:46 +0000

George �鶹��Ƶ researcher is using AI to identify human trafficking hot spots Katelynn C Hipolito Mon, 09/29/2025 - 14:20

Illicit massage businesses (IMBs) run by human trafficking rings are rampant in the United States. A �鶹��Ƶ professor has helped build what may be the best artificial intelligence (AI)-driven tool to root them out.

Human trafficking rings are at their most dangerous when they masquerade as legitimate commercial activity. IMBs are one of the most common ways in which exploitive networks operate in plain sight.

The Network, an anti-trafficking nonprofit, estimates that there are more than 13,000 IMBs active in the United States, raking in annual total revenue of more than $5 billion.

Abhishek Ray

“You are stuck in a massage business. You’re not allowed to go out,” says Abhishek Ray, assistant professor of information systems and operations management at the Donald G. Costello College of Business at George �鶹��Ƶ, describing the plight of IMB workers. “Your passports are taken away, and you’re supposed to do a certain amount of business every day and give the money to the trafficker. It’s a really abhorrent form of abuse.”

Ray is one of a growing group of researchers exploring how various forms of AI could help resource-constrained law enforcement agencies differentiate between IMBs and the legitimate enterprises they try to mimic. His ongoing research using graph neural networks has yielded more promising results than rival approaches, when put to the test in a recent experiment.

His co-researchers on the IMB project are Lumina Albert and Swetha Varadarajan of Colorado State University.

According to Ray, “Graph neural networks are just a fancy way of saying that if I get a graph of a city or locality at one point in time, and I add data to it, can I predict future patterns on this graph if I know the past?”

This approach made sense for detecting IMBs, because try as they might to appear above board, they have geographical needs that conventional businesses don’t. “IMBs don’t allow their trafficked employees to go out of the parlor,” Ray says. “But since they’re humans, they need sustenance. They have to be near groceries, gas stations, where they can get stuff and come back.”

The researchers combined several graph neural networks into a framework called IMBWatch. The training data-set for IMBWatch comprised publicly available information such as online customer reviews, arrest and raid data for known IMBs, and advertisements from websites promoting illicit activities (e.g., the infamous Backpage). The result, in essence, was a series of snapshots mapping the evolution of the IMB network in a given city or county over a period of time. This could then be overlaid on geographical maps to tease out hidden patterns.

To gauge IMBWatch’s relative performance, the researchers let it loose on a testing data-set alongside four other AI models, which were not as sensitive to the nuanced interplay of spatial and temporal factors. Of the five models, IMBWatch provided the most accurate, precise and informative predictions. In other words, it outperformed the others at spotting IMBs among a larger mass of local businesses.

“Graph neural networks are just a fancy way of saying that if I get a graph of a city or locality at one point in time, and I add data to it, can I predict future patterns on this graph if I know the past?”
— Abhishek Ray, assistant professor of information systems and operations management

While encouraging, these outcomes require further confirmation with a larger data-set. “IMBWatch was trained on data from Georgia and Louisiana, not the entire United States,” Ray says. “These were small, manageable data-sets, but we will now scale up to major states such as New York and California.”

The researchers are also looking at enhancing IMBWatch with data related to how workers end up wandering into trafficking webs. These might include “proximity to hospitals, religious places, etc. because a lot of times people are coerced by religious compulsions, or because they’re pregnant and need some care,” Ray says.

This is not Ray’s first foray into the field of AI-fueled anti-trafficking. Previously, Ray co-developed a model for improving machine learning-based detection of human trafficking activity at transit stations and on fishing vessels.

However, law enforcement agencies and other pertinent stakeholders (e.g., business owners) are often wary of adopting AI-based solutions, due to a lack of trust in the technology. Ray and his co-researchers are currently devising a framework that will clarify how these stakeholders can work together with tech experts and, perhaps most importantly, human trafficking survivors to make the best possible use of AI.

“This qualitative piece is required to make sure that people who are on the sidelines, on the fences about using this actually start using it, because that’s the need right now,” Ray says.

Learn more about Artificial Intelligence at George �鶹��Ƶ